Appliance Recycling Centers of America has earned revenues of $33.6 million in the third quarter 2014, up $0.1 million compared with the same period in 2013.
Operating income in the third quarter was $1.1 million, a $0.7 million decline from the same period of 2013.
For the nine months ended September 27, 2014, total revenues increased 4% to $100.3 million, compared with revenues of $96.2 million for the same period in the prior year. Year-to-date operating income this year is $4.4 million, which is $0.9 million ahead of last year.
The company reported net income for the nine months ended September 27, 2014, of $2.1 million, compared with $2.1 million for the same period in the prior year.
The recycling division grew the combination of its appliance recycling fees and appliance replacement revenues by $0.4 million to$12.2 million in the third quarter of 2014.
Appliance replacement revenues increased $0.6 million, while appliance recycling fees declined $0.2 million. The company’s recycling-only program volumes decreased by 4 percent due mainly to the cancellation of two contracts by the utilities supporting the programs.
“While year-to-date results are encouraging, with sales topping $100 million and operating income running $900,000 better than last year, results for the third quarter fell short of our expectations,” said Mark Eisenschenk, president and chief executive officer of ARCA.
Eisenschenk added that performance at ApplianceSmart was impacted by both a $300,000 sales decline and $200,000 in margin compression.
During the quarter, operating income at ARCA Advanced Processing (AAP) was $300,000 below last year as a result of a decline in non-ferrous scrap metal revenues, increased inbound freight, and additional labor costs.
“However, our appliance replacement business, which is a component of our recycling division, continued to have a steady, favorable impact on our results,” Eisenschenk said.
The company has recently signed two new utility recycling contracts, which will generate revenue in 2015.
The company is also working ways to decrease overhead by reducing the size of their retail stores and aggressively managing third-party call center costs. “And we’re committed to improving operational efficiencies throughout the company,” Eisenschenk added.
Meanwhile ARCI also announced that Jeffrey Cammerrer, the company’s chief financial officer (CFO) will step down as CFO effective November 21, 2014.
Effective November 22, 2014, Mark Eisenschenk, president and chief executive officer, will serve as the company’s acting CFO and principal accounting officer while the company looks to fill the gap.
Rajani Baburajan